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As home prices and sales continue to hit new highs, property owners are increasingly looking to remodel and update their homes as the supply of available units remains tight.
A report by Global Market Insights, a Delaware-based market research and consulting firm, found that the current worldwide remodeling market is worth about $3.8 trillion and is expected to grow at a compounded annual growth rate of 4.1% resulting in a valuation of $4.9 trillion by 2027.
Remodeling in the U.S. in 2020 made up a considerable share of that overall growth, Global Market reported, and they predict it will grow at about 3.9% CAGR through 2021, due in large part to the U.S. housing shortage as well as rising home prices.
The residential remodeling market is expected to be the fastest-growing market segment worldwide.
“Exterior additions and alterations will showcase significant growth at a compounded annual growth rate of 3.8% through 2027,” the report said. “Growth is attributed to the rapidly growing remodeling applications in porch, gardens, and garages as these renovations depend on several factors such as high-performance, all-weather resistance materials, type of architecture, stoop for landing, etc. The overall residential segment will eventually rise over the forecast period and is likely to be valued at over $2.8 billion by 2027.
“The rapid growth of industrialization coupled with increasing per capita income is positively compelling the residential renovation segment expansion,” the report continued. “Geographical expansion of brands facilitates global service providers to enter the regional market. For instance, in August 2018, IKEA launched its first store in India to expand its consumer base, which will boost remodeling services during the forecast period.”
Though an increasing number of supermarkets, shopping malls and theaters will sustain the retail-space remodeling market, sluggish growth from the COVID-19 pandemic in the commercial construction sector will somewhat limit future revenue generation.
“The recent COVID-19 pandemic restricted the market growth owing to a halt in production, shrinkage of raw material supplies, and shortage of skilled workforce globally. Social distancing and nationwide lockdowns to combat the spread of coronavirus have squeezed the revenue generation. Additionally, volatile raw material prices will further limit the industry growth. Lifting of lockdowns, rapid vaccination policies, and steady economic recovery are likely to offset these negative impacts and widen the business.”
